Shattuck v. Smith

• Decision Date: 05 September 1896
• Parties: SHATTUCK et al. v. SMITH et al.
• Court: North Dakota Supreme Court

6 N.D. 56

69 N.W. 5

SHATTUCK et al.

v.SMITH et al.

Supreme Court of North Dakota.

Sept. 5, 1896.

Syllabus by the Court.

1. When an assessor, acting within his jurisdiction, and in good faith, and in the exercise of his honest judgment, assesses certain property for taxation at less than its actual value, such undervaluation will not invalidate the entire assessment.

2. Nor will the omission of taxable property from the assessment roll by the assessor, while so acting, invalidate the entire assessment, whether such omission be through inadvertence or design, through a mistake of facts or a misapprehension of the law.

3. When by statute the duty of assessing railroad property is devolved upon the state board of equalization, it is not sufficient to invalidate such assessment to show that the value fixed by such board was less than the actual value in the judgment of the said board, when the record also shows that there are grave doubts as to the liability of the property for taxation, and is silent as to whether or not the board regarded it as taxable.

4. It is competent for the legislature, by curative act, to validate a defective levy which it might originally have authorized to be made in the manner in which it was done.

5. The statute required that the county tax levy should be based upon an itemized statement of county expenses for the ensuing year, and that such statement should be included in the published proceedings of the board of county commissioners, but did not further indicate the form or nature of such statement. The records of such board showed a levy of a specific amount for each item of county expenses. Held, that this was a sufficient compliance with the law as to such itemized statement.

6. The statute relating to proceedings by city councils declared, “The yeas and nays shall be taken upon the passage of all ordinances, and on all propositions to create any liability against the city or for the expenditure or appropriation of its money.” Comp. Laws, § 880. Held, that this did not require that the yeas and nays be taken upon the passage of a resolution levying a general city tax.

7. Under the revenue law of 1890, a tax sale is not rendered invalid by reason of the auditor's selling for an amount in excess of the amount due.

8. A state law which directs that the entire tract of land be sold to the highest bidder, for the taxes delinquent thereon, violates no constitutional provision.

Appeal from district court, Cass county; William B. McConnell, Judge.

Action by Richard A. Shattuck and others against O. P. Smith and others. Judgment for plaintiffs, and defendants appeal. Reversed.

Charles A. Pollock and R. M. Pollock, for appellants. Miller & Resser and J. E. Robinson, for respondents.

BARTHOLOMEW, J.

The object sought to be attained by this action is, in effect, the cancellation of certain tax-sale certificates upon realty in the city of Fargo, and to permanently enjoin the issuance of any deeds upon such certificates. The plaintiff is the representative of the fee owners of the realty, and the defendant is the tax-sale purchaser. The validity of the taxes in the city of Fargo, for the years 1890 to 1893, inclusive, is attacked. The basis of the attack consists in alleged under-valuations by the assessors, and omissions from the assessment roll. There is no claim that plaintiff's land was assessed in excess of its actual value, or that it was exempt from taxation. But it is claimed that by reason of such undervaluation, and omission of other property, plaintiff's taxes were much larger than, in justice and equity, they should have been. It is also claimed that there was no valid levy of taxes for said years either by the county commissioners or city council. There was a trial by the court. Plaintiff prevailed, and the case comes into this court, on defendant's appeal, for hearing on the merits. There is no real conflict of evidence upon any point. It is simply a question of the legal effect of the competent testimony introduced upon trial. On the question of assessment, the testimony shows that the Columbia Hotel, in the city of Fargo, was worth, including grounds, building, and furniture, at least $100,000. This property was assessed for less than $20,000. Other property, known as the “Bishop Shanley Property,” was assessed at less than 20 per cent. of its value. We may dismiss this piece of property, however, with the statement that the board of equalization remitted all taxes thereon upon the grounds that the property was used exclusively for church purposes. No complaint is made of the action of the board; hence the assessment becomes immaterial. There was also in the city of Fargo a tract of land, valued by witnesses at $75,000, belonging to the Northern Pacific Railroad Company, but outside of the right of way, which was entirely omitted from the assessment roll. On the right of way of said railroad company, which is 400 feet in width, and extends across the city from east to west, were many valuable warehouses, and a large hotel. The ground upon which the buildings stood was not assessed by the city assessor, although the buildings themselves were properly assessed. Our statutes (chapter 135, Laws 1890) require the state board of equalization, at its August meeting in each year, to assess at its actual value the franchise, roadway, roadbed, rails, and rolling stock of said railroad company. In each of said years this property was assessed by said board at $2,500 per mile. This, according to the testimony, is only about one-eighth of its actual value, or of what it would cost to reproduce it. The farm lands of Cass county, in which the city of Fargo is situated, were assessed during said years at about one-half what witnesses swear they are worth. Do these facts render the assessment absolutely void, and the taxes based thereon illegal? It will be at once perceived that these objections urged against the taxes are very far-reaching. If sustained in their entirety, they must invalidate the taxes for the years in question, not only in the city of Fargo and county of Cass, but throughout the entire state. This would result in such a flood of litigation, such disturbance of titles, and such confusion and chaos in the public revenues, that unless forced thereto by well-settled and plain rules of law, we should hesitate long before adopting a ruling that involves such unfortunate results. Taxation is, at its best, one of the most fruitful sources of litigation known to the law. It is a proceeding in invitum, and one which the average taxpayer seems to feel in duty bound to defeat when possible. States, counties, and municipalities can be sustained only by the expenditure of a certain amount of revenue. This revenue can be obtained only through the exercise of the sovereign power of taxation. To obtain this necessary revenue, the state delegates to the various counties and municipalities this sovereign power. It necessarily follows that many men participate in the exercise of this power,-men of widely-variant minds, and men subject to those frailties of judgment from which no man is entirely exempt. Uniformity of taxation is demanded by that section of our constitution (section 176) which declares that “laws shall be passed taxing by uniform rule all property according to its true value in money.” It has ever been the aim of the legislature to realize this universal demand of constitutional law. Nevertheless, absolute uniformity and equality in taxation has ever remained a Utopian project,-accessible in theory, but never reached in practice. Inequalities and injustice in taxation, more or less pronounced, always have existed, and, from the necessities of the cause, it would seem that they must exist. But this has not generally been supposed sufficient to invalidate a tax. If it were, the collection of revenue would instantly and permanently cease. Long before the courts ruled upon the subject, the common sense of mankind united in declaring that it were better that the individual should suffer the slight injustice, rather than that the wheels of government should stop. But that a tax may be invalidated by reason of matters connected with the assessment and levy is an undisputed proposition. It remains, then, to determine in this case whether the matters complained of do or do not invalidate the tax in this case, for it is conceded that plaintiff must fail in the action unless the taxes for which his lands were sold were void. And, in discussing this question, we repeat what we said in Farrington v. Investment Co., 1 N. D. 102, 45 N. W. 191: “Respondent attacks the validity of the tax, and the burden is upon him to establish its invalidity; and it is not enough, for the purposes of this case, that the court cannot be able to say from the evidence that the tax is valid. The presumption is that the tax is valid, and this presumption necessarily extends to every act upon which the tax in any measure depends. The court must be able, upon the evidence, to pronounce judgment against its validity.” See cases cited.

The first attack in this case is directed against the assessment. The assessor is the person who initiates the tax proceedings. An assessment is absolutely necessary to any valid tax. The law requires the assessor to assess all property not by law exempt from taxation, and to assess it at its actual value. Necessarily, in this process, two things are left to the judgment of the assessor: He must say primarily what is the actual value of the property. To do this with any approach to accuracy requires broad knowledge, extended experience, and excellent judgment. He must also say whether or not any given piece of property belongs to any of the classes which are by law exempt. Simple as this may appear, it is often a difficult and delicate task. The law exempts from taxation all property of the United States, of the state, and of the county and municipal corporations;...